Please accept my apology for not being here personally to speak before the public forum. As you know, I now wear several hats in the new administration. Aside from being secretary of agrarian reform, I am also the lead convenor of the National Anti-Poverty Commission. This same week, I am leading a delegation to the ESCAP Ministerial Meeting in Bangkok where the Philippine government will make a case for social development as teh key to the region's recovery from the financial and economic crisis.
I would like to focus my presentation on the prospects for poverty eradication under the new administration. President Estrada insists on working not just for reduction, but eradication of poverty. He has ordered his Cabinet to draw up programs and projects to fulfill his vision of a society free from poverty in the next millenium.
My paper will deal mainly on the two most important components of our anti-poverty program -
The first component seeks to lift 1.8 million agrarian reform beneficiaries out of poverty. The second, which is being coordinated by the National Anti-Poverty Commission, hopes to improve the living conditions of at least 2 million families in urban and rural areas. Under the Medium Term Development Program, our goal is to reduce poverty incidence from 32.1% in 1997 to 25-28% in 2004.
Let me begin by citing the latest Poverty Report (1998) of the United Nations Development Program (UNDP), "Overcoming Human Poverty".
The report states that while economic growth is necessary for poverty reduction, it is not a sufficient condition for a significant reduction in poverty. What is critical is not the "pace of growth but also its character - whether or not it is pro-poor".
It is possible to have moderate growth rates and still have a significant impact on poverty reduction. In China, when the focus was in raising agricultural GDP in response to land distribution, poverty in rural areas fell from 250 million in 1978 to 125 million in 1985. But in 1990 to 1994, when China shifted away from agriculture and the rural areas to export-oriented industry and urban areas, the decline in poverty was only minimal.
In the case of Tunisia, from 1975 to 1995, GDP per capita was a moderate 2.2% a year, but the proportion in poverty fell from 22% to 6%.
These experiences give us hope that we can deliver on our promises. The National Economic and Development Authority (NEDA) projects only moderate growth rates of between 4.7% to 5.3% in GDP. Given this growth scenario, the key to delivering on our promises, as the UNDP report says, is to focus growth in the sectors that "employ the poor and improve their incomes."
This is exactly what the Estrada administration is trying to achieve. We are redirecting government programs and resources toward the agriculture sector. These indicators tell us why the countryside must be the focus of the anti-poverty program:
By focusing on rural poverty, we also hope to create an impact in curbing urban blight and in reducing pressure on the upland ecosystem.
Let me now explain our strategies toward countryside development. I take exception to what some critics have said that President Estrada's pro-poor rhetoric is not backed by a concrete program.
We have a program. The whole bureaucracy is now geared toward addressing the twin goals of food security and poverty eradication.
In particular, we have a countryside development program designed to promote social equity, sustainable management of resources, a modernized agricultural sector, and a diversified rural economy.
How do we intend to achieve these goals?
The Department of Agrarian Reform (DAR) is at the forefront of addressing the inequitable land ownership that persists in the countryside. Ten years after the Comprehensive Agrarian Reform Program (CARP), 57% of the target scope of 8.1 million hectares of land had been distributed. The bulk of the lands distributed has been public lands, plus the private rice and corn lands under the land reform program of the Marcos government.
Land reform has so far been implemented in areas where land ownership inequality is not a major problem. it has yet to make a significant impact in regions with high inequality, such as Western Visayas and Bicol.
In February 1998, Congress extended CARP for another 10 years and provided an additional P50 billion. On the part of DAR, we are now at the most important phase of CARP: the distribution of private lands. Our priority in the next six years is to distribute 1.3 million hectares of private lands in the following categories:
President Estrada said last week that he would like to be remembered in history as the leader that finished land reform. He instructed the three principal agencies involved in land distribution - DAR, DENR, and Land Bank of the Philippines - to coordinate efforts in order to finish CARP. For us to achieve this, we will require an additional budget of P6 billion to the annual budget.
This year, financial and transition problems have limited DAR's 1999 target to 175,000 hectares. According to the Land Bank, we can distribute around 140,000 hectares of "compensable" land this year. However, we hope to speed up distribution in the remaining years of the Estrada administration. Our target is to distribute an average of 250,000 hectares annually during the six-year term.
We have adopted new and creative approaches to land distribution. We call it the I.D.D. approach - Integrated, Differentiated, Demand-driven. We believe this is a faster way of distributing land and a better way of promoting farm productivity.
Integration means that the provision of support services to farmer beneficiaries is simultaneous, not sequential, to the transfer of land. Land tenure improvement is integrated with teh development of agrarian reform beneficiaries.
In the past, the DAR was focused on meeting land distribution targets. This time, we are shifting targets the number of beneficiaries and communities served.
We are developing best practices - finding the right way of distributing various types of land - in the implementation of agrarian reform. We have adopted a differentiated and demand-driven approach to land distribution.
Differentiated means we have distinct strategies for various types of farms. We are taking into account differences in crops grown, land sizes, agronomic conditions, and specific political settings.
Demand-driven means targeting not just the supply of land but the demand for land. We are giving priority to areas where there is strong demand for land from beneficiaries. We are concerned not just with meeting land distribution targets; we are focusing on areas where beneficiaries have the highest potential in making reformed lands productive.
We also have an evolving "corporative" strategy. This is a joint partnership between farmers' cooperative and an agribusiness corporation. The corporative strategy starts with actual land transfer. Land is transferred to beneficiaries through a collective certificate of land ownership award (CLOA). Businessmen invest capital and technology in the cooperative. The cooperative pays for the land from the revenues generated by the cooperative from the joint venture agreement.
We hope that through such creative approaches, we will be able to complete land reform in six years. Thereafter, the role of DAR will be to help ensure sustainable rural development.
Party due to the inroads of land reform in the countryside through the years, land monopoly, except in sugar and coconut farms, is no longer the major reason for low farm productivity and incomes.
We believe that in order to increase farm productivity and incomes, we must also enhance farmers' access to capital, build their capability to process and market their own produce, and upgrade their knowledge and skills in making land productive.
We are addressing this need through a National Agrarian Reform Beneficiary Program. This aims to increase the reach of our program for farmer beneficiaries from 26% in 1998 to 75% by year 2004.
The biggest part of this program is the Expanded Agrarian Reform Communities (ARCs) scheme. An ARC is a cluster of land reformed villages. Under the Ramos, 920 ARCs were launched in one million hectares. Within an ARC, beneficiaries receive various services - financing, production, processing and marketing.
With the help of the donor community, ARCs have shown their potential in reducing rural poverty. In all crops, ARCs have generated higher yields and incomes. We have therefore decided to continue the development of ARCs.
We have improved the original ARC concept by integrating basic social services - basic education and literacy, primary health care and family planning, sanitation and shelter - in the services provided to ARCs.
In addition, we have incorporated other important services on sustainable resources management, agricultural productivity and diversification, rural credit, rural infrastructure, research and extension, and gender development.
We will establish an additional 1000 ARCs until 2004. This translates to an expansion in ARC coverage from one million hectares to two million hectares of land reformed villages.
Our National Agrarian Reform Beneficiary Program will require an annual budget of P2 billion. Due to financial constraints, we are presently dependent on the donor community fo rour agrarian reform beneficiary program. We are seeking additional support from the international community, either official or non-government, for this program.
It is a program designed to increase the capability and self-reliance of farmer beneficiaries. It seeks to ensure adequate revenues and incomes for a decent quality of life in the rural areas.
The agriculture sector will underpin economic recovery. We expect agriculture to post a growth of 3% to 3.5% GDP this year. We expect an average growth of 2.6% to 3.4% in agriculture from 1999 to 2004.
We are implementing a 10-point agenda to modernize our agriculture and fisheries sector. The more important components of our Agrikulturang Makamasa program are the following:
A more productive and competitive agriculture sector will also boost growth in food manufacturing and trade.
We have given greater priority to agriculture in the national budget. In addition, we launched last week the Agri-Agra ERAP bonds. The government was able to raise P5 billion in its initial offer. This first tranche of Economic Recovery for Agricultural Productivity (ERAP) bonds will be used to finance agricultural modernization projects. We hope to eventually raise P50 billion for agriculture through the ERAP bonds.
Total tenders for this first auction of ERAP bonds reached P25 billion. Banks are using the ERAP bonds as an alternative form of compliance to the Agri-Agra Law. This law requires banks to allocate at least 25% of their loan portfolio to agriculture and agrarian reform credit.
President Estrada has also approved the 1999 Investment Priorities Plan. It redirects investment generation efforts toward countryside development, with special priority to the Autonomous Region for Muslim Mindanao.
Aside from getting support from the donor community, we are also using internally generated funds and resources more productively.
In January, President Estrada approved the Convergence Towards Sustainable Rural Development strategy. This is a program designed to overcome the fragmented way by which development intervention has been undertaken.
Through the Covergence strategy, the national government, local government units, donor community, business sector and civil society pool financial, technical and human resources in various points of convergence throughout the country.
We have identified nine convergence sites covering 28 provinces: Cagayan Valley, Central Luzon and Bicol River Basin systems in Luzon; Negros Island, Panay Island and Bohol in the Visayas; and Zamboanga Peninsula, CARAGA region and the Davao corridor in Mindanao.
Within these nine sites, we will showcase our sustainable rural development program. The DAR, the Department of Agriculture and the Department of Environment and Natural Resources (DENR) are the leading agencies involved in this endeavor.
The DAR ensures equity through land distribution and by building food producers' capabilities and self-reliance. The DENR lays the foundation for sustainable agricultural development in a regenerative, not degraded, environment. The DA uses regenerative life forces for sustainable and optimal agricultural production.
Social reforms act as the bridge to marginalized sectors of our population. In particular, agrarian reform program enables the rural poor to get on board the process of economic growth and development.
The successful implementation of agrarian reform thus serves as a building block for social capital formation and civic entrepreneurship. CARP brings together various stakeholders, from small farmers to local government units and agribusiness corporations. It provides the basis for the formulation of a common vision for regional development among state, civil society and market actors.
In line with our goal of promoting trust and social capital among the different stakeholders, we are implementing the following:
The strengthening of social solidarity will promote mutually beneficial relations between food producers and entrepreneurs. They will come face-to-face in the spirit fo civic entrepreneurship. We will see the growth of civic entrepreneurs, people whose strategic interests are linked with the development of the local economy.
To help make this happen, we are continuing the marketing investment program for ARCs. The Department of Trade and Industry (DTI) also has its Developing Rural Industries and Village Enterprises (DRIVE) program which seeks to directly link food producers with agribusiness companies. Food producers are ensured of markets and higher buying prices for their agricultural commodities. Agribusiness firms are guaranteed reliable supply of quality farm produce.
On the part of DAR, we have begun retooling our organization and personnel to meet our new approaches to agrarian reform. We are retraining our people toward a post-CARP scenario. This is where all public and private lands have been distributed and our task will be to ensure that lands are productive and able to support a good quality of life for our food producers.
This requires development facilitators who have skills in community organizing, cooperative development, rural financial intervention, rural enterprise development, social infrastructure building and project management. We are enhancing partnership with NGOs and the business sector to meet this goal.
We are also continuing internal reforms to clean up DAR and transform it into a lean and mean organization.
Agrarian reform holds the key to meeting our goal of food security and poverty alleviation. WE hope to lift 1.8 million rural families out of poverty through our agrarian reform program. With sufficient backing from the donor community, we will be able to significantly reduce the incidence of rural poverty.
The National Anti-Poverty Commission (NAPC) was established through the Social Reform and Poverty Alleviation Act (RA 8425). Its purpose is to coordinate the National Anti-Poverty Action Agenda and to operationalize flagship anti-poverty programs.
The NAPC has mapped out an anti-poverty framework that focuses on democratizing the poor's access to capital.
The NAPC now has 10 flagship programs. They address various concerns, namely: livelihood and employment, microcredit and savings, displacement assistance, health insurance, basic social services, poverty monitoring, skills retraining and local partnerships.
NAPC currently has P2.5 billion from the national budget and P2.8 billion from foreign grants and loans, particularly the Asian Development Bank and the World Bank. NAPC's programs and projects, principally through microfinance, are targeted to reach 2.6 million families. The core projects are microlending to women and the setting up of cooperative banks in the provinces.
Last week, President Estrada directed the NAPC to put in place livelihood programs for the 100 poorest families in all provinces and cities. He expressed hope that with the help from the private sector and the donor community, around 9 million Filipinos can be lifted out of poverty.
These efforts are in line with our commitment to the Microcredit Summit which called for an expansion of credit for self-employment and other business services to 100 million of the world's poorest families, especially women, by year 2005.
I hope I have enlightened you on how the Estrada administration intends to fulfill its promises of food security and poverty eradication.
Nearly ten months after assuming office, the Filipino people have expressed strong support for our initiatives. The Social Weather Stations, the most credible polling organization in the Philippines, reported a net performance rating of +67 in March 1999 (77% satisfied and 10% dissatisfied) for President Estrada. Support for President Estrada is highest among the lowest income group with 81% satisfied with his performance. Rural areas gave a 79% approval, 3% higher than in urban areas.
In November 1998, the national administration registered a net satisfaction rating of +36, the highest level since 1992.
I interpret these ratings as a strong endorsement for the programs and projects we have set in place in the last nine months. In May 1998, the people chose Joseph Estrada as our leader for the next millenium based on his vision of a just society free from poverty and secure in food.
The key to the realization of this vision is a better bureaucracy, support from the international community, a socially responsible business sector, and a civil society that continues to put pressure on the state and builds self-reliance from below.
